Too Perfect Timing

From The Times October 16, 2009

Dentist Neel Uberoi ‘made £150,000 through insider trading with intern son’Michael Herman

A dentist made a “fabulous” profit on shares after his son, who was on a work experience attachment, tipped him off about imminent takeover deals, a court heard yesterday.

Neel Uberoi, 62, bought tens of thousands of shares in three companies based on “precise information” from his son Matthew, 24, who was on a work placement at Hoare Govett, one of the oldest banks in the City, it was alleged.

Leaking information about an upcoming takeover and buying shares based on that information are criminal offences.

Known as insider dealing, and punishable by a maximum of seven years in prison, the offences are possible because a company’s share price usually increases with the news that another business wants to buy it, allowing an insider to buy shares ahead of the crucial announcement.


Mr Uberoi and his son are each accused of 17 counts of insider dealing by the Financial Services Authority (FSA), the City watchdog that is responsible for policing and prosecuting illegal share deals. The pair deny all charges.

John Kelsey-Fry, QC, for the prosecution, told the jury that Mr Uberoi, from Kenley, in Surrey, was able to time his share purchases “exceptionally well” because his son, who lives in Fulham, West London, was part of the team advising on the transactions at Hoare Govett, which is now part of the Royal Bank of Scotland.

Mr Kelsey-Fry told Southwark Crown Court that Mr Uberoi’s most profitable trading was in the shares of NeuTec Pharma, a British pharmaceuticals company taken over by its Swiss rival Novartis in May 2006.

Mr Uberoi, who had never owned NeuTec shares before, began buying them on a Tuesday morning after a Bank Holiday weekend, Mr Kelsey-Fry said. Over the next eight days he spent about £126,000 buying further NeuTec shares at an average price of £5 each.

The previous Friday a crucial meeting had taken place between senior members of Matthew Uberoi’s team at Hoare Govett and their opposite numbers at Lehman Brothers, the bank advising Novartis on the takeover.

Two hours after Mr Uberoi’s final purchase of NeuTec shares the company announced that it was in takeover discussions with Novartis. The share price immediately doubled to more than £10, allowing Mr Uberoi to sell his shares for a £140,411 profit.

Mr Kelsey-Fry told the jury that this pattern was repeated with the shares of two other companies: Transense Technologies, taken over by Balfour Beatty, and Gulf Keystone Petroleum, which announced a significant collaboration with British Gas. The court heard that Mr Uberoi spent more modest amounts on these two companies but that he was “equally fortunate in his timing”.

“On each of these occasions his son was working on the very Hoare Govett team advising on the transactions about to be announced,” Mr Kelsey-Fry said.

The case continues.

http://www.timesonline.co.uk/tol/news/uk/crime/article6876971.ece